1. As a business coach, I want you to remember, he who has the most options always wins. Make sure that you have at least three banks competing for your business and your loan at one time so that you can choose the loan package that is the best for you and your business.
“Don’t worry about failure, you only have to be right once.”
(The co-founder and CEO of Dropbox)
28.5 – Learn to Look at Your Business Like a Banker Would
Most entrepreneurs go into bank meetings and make absolute fools of themselves by going on and on about their passion, the market’s need for their product and their passion for their passion. When they start getting asked the questions that bankers want the answers to, they generally get very quiet and this is not a good thing. Bankers generally don’t care about the product or service that you are passionate about at all, or if they do care, they care very little. Since I have been a business coach, I have learned that banks simply focus on your margins, your key performance indicators, the gross operating profit, your gross profit margin, your break-even point, your leadership team, the scalability of your business model, and the consistency of your financial performance.
For a mind blowing training from the business coach that will explain to you everything you need to know about learning to look at your business like a banker would, watch: www.Thrive15.com/learn-to-look-at-your-business-like-a-banker-would
28.6 – Improve Your Personal Credit and Financial Statement
You want to make sure that you have a traditional financial statement completely filled out and ready to go before meeting with your banker so that you can put on an absolute laser show when you are presenting to this person. Bankers are typically taught to turn off that “passion finding and super connector personality” when they are analyzing deals because emotions tend to cloud their judgment.
For a detailed training from the business coach on how to get your finances in order to make your business bankable, visit: www.Thrive15.com/how-to-make-your-business-bankable-before-attempting-to-get-a-small-business-loan
To download an interactive worksheet to guide you through the process of creating a personal financial statement, visit: www.Thrive15.com/how-to-create-your-personal-financial-statement
It’s important that you are aware of your personal credit score before meeting with your lender for the same reason it’s important to know if you have a big piece of lettuce stuck in your teeth before you get up to give a big speech. Not knowing this can make you look foolish. You have to know if you have missed any payments, if you are behind on any payments or if you are operating at the absolute maximum of your credit limit. Whether you know these things or not, trust me, your banker will know.
To have your credit score analyzed by our Thrive15.com coaches and to receive a complimentary credit score-enhancing business coaching session, fill out the form at: www.Thrive15.com/personal-credit-score
28.7 – Be Open and Honest When Communicating with Your Banker without Exposing Your Sins that Have Nothing to Do with Your Loan
When dealing with your banker, it’s important that you disclose any issues that you have had in the past that are well documented and easily findable by a banker. If you do not do this, then you are going to create an aura of distrust between you and the banker and this is often irreparable. However, you don’t want to tell your banker that you once were arrested by the campus police at your local college when you were discovered streaking with the rest of the fraternity. If that is not on your record, don’t voluntarily create problems for yourself. At the end of the day, be open and honest about your financial situation, but don’t tell the banker about your marital problems and about that weird rash you have had on your left foot since you went camping 18 months ago.
When you bring money into your business, you are almost always forced to also place a value on your company.
To learn how to accurately place a value on your business, watch the video at: www.Thrive15.com/how-to-determine-the-fair-market-value-of-your-business
29.1 – Raising Capital Investor Capital 101
If you sincerely desire to raise capital for your business via the route of bringing in outside investors, as a business coach, I have learned that it is going to require approximately 40 hours of your time to get prepared to pitch and approximately 10 hours of your time to practice “The Art of the Pitch.” More often than not, a seasoned investor (who didn’t acquire his money from a trust fund or winning the lottery) will reject your pitch deck and not your actual business plan. They essentially do not give your business idea / pitch a chance because they believe that your pitch deck looks so bad (or is non-existent) that they can’t fathom how you could possibly grow a successful business. If you don’t know what a pitch deck is, don’t feel bad. I used to not know what a pitch deck was either.
A pitch deck is a quick presentation, most commonly produced using Keynote, Prezi, or PowerPoint to give a compelling presentation of your business plan to a group of potential investors. It’s normal to use your pitch deck during both virtual / online meetings and face-to-face meetings with potential investors, partners, and the co-founders of your company.
To bring in investor capital, you must put in the time needed to create a PowerPoint presentation that proactively and clearly answers all of the questions that a potential investor would ever have before they ask. The “Perfect Pitch Deck” deck outline is accurately described by Naval Ravikant, founder of AngelList.com, in his book titled Pitching Hacks. According to Naval, his favorite deck template comes from David Cowan at Bessemer Venture Partners. You can find other templates, but this is the best. Here’s Naval’s adaptation of David’s template, taken directly from Pitching Hacks:
1. Cover. Include your logo, tagline, and complete contact information.
2. Summary. Summarize the key, compelling facts of the company. Make sure you cover all the topics that are in your elevator pitch — in fact, just steal the content from the elevator pitch.
3. Team. Highlight the past accomplishments of the team. If your team has been successful before, investors may believe it can be successful again. Include directors or advisors who bring something special to the company. Don’t include positions you intend to fill — save that for the milestones slide. Put yourself last: it seems humble and lets you tell a story about how your career has led to the discovery of the…
4. Problem. Describe the customer, market, and problem you address, without getting into your product. Emphasize the pain level and the inability of competitors to satisfy the need.
5. Solution. Introduce your product and its benefits and describe how it addresses the problem you just described. Include a demo such as a screencast, a link to working software, or pictures. God help you if you have nothing to show.